Private companies are to be given sweeping new powers to run hospitals, more schools and local council services under Budget plans to be unveiled this week, according to leaked documents.

The coalition's "growth strategy" – to be published on Wednesday at the same time as George Osborne, the Chancellor, delivers the 2011 Budget – will promise an "across the board change" in the way public services are run in future.

The controversial move paves the way for private companies to run more schools as well as whole departments of NHS hospitals and council-run services such as parks and road maintenance. Only the judiciary and national security will be explicitly ring fenced off from the private sector.

A leaked late draft of the strategy document, seen by The Sunday Telegraph, promises to "set out an across-the-board change that opens all spheres of government activities to outside providers, except in a small number of specific cases (the judiciary and national security)."

Mr Osborne will present his announcement as a "Budget for growth" which will boost enterprise and cut red tape at the same time as recognising that families are feeling the pinch from higher prices and job losses.

He may, however, be forced to lower the Government's growth forecasts in the wake of last week's decision by the Organisation for Economic Co-operation and Development to downgrade its prediction for the growth in Britain's economy in 2011 from 1.7 per cent to 1.5 per cent.

The Chancellor is expected to scrap a planned increase of 1p a litre on fuel duty which was set to come in next month, a move which will cost the Treasury around £500 million a year.

Tory MPs also expect him to pave the way for a fuel duty "stabiliser" which will see the level of duty cut when oil prices are high – as they are currently – and rise when they are low. The move would benefit motorists in the short term but would still see them paying the same level of duty over an economic cycle.

A ComRes poll for the campaign group FairFuelUK has found that only 11% of the public believe the 1p rise in duty should go ahead, while 77% think it should be scrapped.

Government sources confirmed that the threshold for paying income tax would be raised by £1,000 to £7,745 from next month, taking 500,000 people out of income tax altogether and increasing net earnings by £200 a year for a basic rate taxpayer.

Mr Osborne is likely to restate the aim, first demanded by the Liberal Democrats, of increasing the income tax threshold over time to £10,000.

However, the level above which people pay income tax at 40 per cent will drop to £42,475, meaning there will be 700,000 more higher rate tax payers from April.

In addition, previously announced plans will see a rise in National Insurance rates from 11 per cent to 12 per cent for employees and from 8 per cent to 9 per cent for the self employed.

Coalition sources said Mr Osborne was likely to restate his view that the 50p top rate of income tax, introduced under Labour and hitting salaries above £150,000, was temporary and ripe for repeal when the time was right.

However, the Chancellor was not expected to announce any early move to scrap the levy – seen by business as a key brake on UK operations.

Overall corporation tax, which is already being progressively cut for larger companies down to 24 per cent over the next four years, could see this decrease accelerated, but sources last night said no final decision had been made on this.

Smoking and drinking face typical annual increases in duty – with wine likely to go up by 13p a bottle while a bottle of spirits could see its price rise by around 51p.

Sources expect a pack of cigarettes to go up by about 15p while super-strength lagers face a rise of 3p a pint. In a "compensatory move", the duty on low-alcohol beers is set to be cut by 3p a pint.

With the emphasis on the growth agenda, planning restrictions are likely to be eased, as revealed by this newspaper last week, benefiting both house builders and businesses wishing to open out-of-town developments.

However, a plan to liberalise the Sunday trading laws, by allowing councils to ease restrictions on big stores which currently prevent them from trading for more than six hours, is not now expected to go ahead.

Ministers were said to have taken fright after the fiasco of the U-turn on proposals to sell of Britain's forests – and to have pulled out of a confrontation with small shopkeepers, who claim their trade would be hit, unions, and Christian groups.

One move which will please bigger business is likely to see the tax paid by major companies on their foreign earnings cut in an effort to prevent UK companies domiciling themselves in lower-tax regimes such as Ireland. Again, this is likely to be controversial at a time when millions of families are facing tax rises.

Mr Osborne will use the Budget to claim that there can be no "backsliding" from the Government's overriding aim – introducing £81 billion of spending cuts over the next four years in a programme announced last year in his Spending Review.

There will be a scattering of "good news" announcements too, however – including a £300 million package aimed at tackling youth unemployment. This will see the number of apprenticeship schemes – which half their costs funded by the taxpayer – boosted by 50,000 over the next four years.

In addition there will be 100,000 work experience slots for 18-24 year-olds who have never had a job over the next two years. While on the schemes, youngsters continue to receive Jobseekers Allowance.

The Department for Work and Pensions will tomorrow announce new moves targeting, with fresh restrictions, cowboy health and safety 'consultants' who exploit small businesses by providing overpriced and often bad advice. At the moment anyone can set up as a health and safety consultant in a market which is estimated as being worth up to £1 billion a year. The move to give private companies new powers to run schools, hospitals and other services is likely to provoke a fresh clash with the unions and could be a potential "dividing line" with Labour if Ed Miliband's party, as seems likely, opposes it as a step towards mass "privatisation of public services.

However, it will help make good a promise made earlier this year by David Cameron when he pledged in an article in The Daily Telegraph to release "the grip of state control and place power in people's hands".

He wrote at the time: "This is a transformation: instead of having to justify why it makes sense to introduce competition in some public services – as we are now doing in schools and in the NHS – the state will have to justify why it should ever operate a monopoly."

Ministers are expected to change the law so that they need no longer, in future cases, legislate separately every time they want to bring private sector providers in to state services. Charities are also expected to be able to benefit from the changes – opening up an important new revenue stream for them in difficult economic times.